GLOBAL MARKETS-World shares near record levels as vaccines fuel normalisation hopes

By Hideyuki Sano

TOKYO, Feb 5 (Reuters) - - Global shares traded near record highs on Friday, with Asian stocks taking their lead from Wall Street, as progress in vaccine distribution prompted bets on further normalisation in the global economy and an earnings recovery.

An index of the world's major 50 markets, MSCI ACWI .MIWD00000PUS, rose 0.2% to 667.90, coming within reach of a record high of 670.82 touched about two weeks ago. It was the fifth consecutive days of gains.

European stocks are expected to open on a firm footing, with euro stoxx futures STXEc1 up 0.3% in early trade while Britain's FTSE futures FFIc1 were flat.

MSCI's gauge of Asian shares outside Japan .MIAPJ0000PUS rose 0.6% while Japan's Nikkei .N225 rallied 1.5%.

On Wall Street, each of the major indexes rose more than 1% on Thursday, with the Nasdaq Composite Index .IXIC and S&P 500 .SPX setting record highs.

"What's driving the market is corporate earnings are posting a strong recovery," said Jumpei Tanaka, strategist at Pictet.

"And there are piles of money saved in MMF (money market funds) and elsewhere that are likely to be invested in stocks once the economy normalises as vaccination programmes progress."

Expectations of a large stimulus by U.S. President Joe Biden's administration also supported risk sentiment while better-than-expected data on U.S. job markets released in the past two days is fanning a bullish mood ahead of the payroll report due at 1330 GMT.

Longer-term U.S. Treasury yields rose in anticipation of a large pandemic relief bill from Washington as well as on heightening inflation expectations.

The benchmark 10-year yield US10YT=RR stood at 1.137%, having risen to a three-week high of 1.162% the previous day while the 30-year bonds US30YT=RR yielded 1.931%, near its 10 1/2-month high of 1.951% touched on Thursday.

Bond yields rose in Europe as well, with Germany's 30-year government bond yield DE30YT=RR climbing back into positive territory for the first time since September.

A market gauge of future U.S. inflation USIL5YF5Y=R was at its highest since October 2018 while that for the euro zone EUIL5YF5Y=R hit its highest since May 2019.

In the currency market, the dollar strengthened against most of its peers as traders' focus shifted to the relative strength of the U.S. growth.

Until recent weeks, the dollar had been sold on expectations that a global economic recovery will promote outflows of funds to riskier currencies from the safe-haven dollar.

The U.S. dollar index =USD stood near a two-month high, having risen 1.1% so far this week, on course for its biggest weekly increase since late October.

The euro changed hands at $1.1964 EUR=, having hit a two-month low of $1.1952 while the yen hit a 3-1/2-month low of 105.70 per dollar JPY=.

"It seems markets are now trying to trade on economic normalisation based on progress in vaccination," said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.

"The fact that the only currencies that are doing better than the dollar over the past two days are the British pound and the Israeli shekel, the two countries that are going further ahead in vaccination, seems to support that."

The British pound stood at $1.3678 GBP=D4 not far from its 2 1/2-year peak of $1.3759 hit late last month.

The shekel ILS=D4 rose over the past two days, reversing its decline since mid-January after the Bank of Israel intervened to stem the shekel's strength after it had hit a 24-year high.

Strength in the dollar pushed gold to a two-month low of $1,785.10 per ounce XAU= on Thursday. The metal was last traded at $1,797.40.

Oil extended its gains on upbeat economic mood, falling inventories and the OPEC+ decision to stick to its output cuts.

U.S. crude CLc1 rose 1% to $56.80 per barrel and Brent LCOc1 was at $59.38, up 0.9%.

(Additional reporting by Imani Moise; Editing by Richard Chang, Christian Schmollinger and Ana Nicolaci da Costa)

((Imani.Moise@thomsonreuters.com; +13322191733;))